Performance of Firms and Market Contestability
Students will evaluate the performance of different market structures using concepts of productive, allocative, and dynamic efficiency. They will also explore the theory of contestable markets.
About This Topic
Students will evaluate the performance of different market structures using concepts of productive, allocative, and dynamic efficiency. They will also explore the theory of contestable markets.
Key Questions
- Which market structure is the most efficient?
- How does dynamic efficiency justify the existence of monopolies?
- How does the threat of entry affect the behaviour of incumbent firms?
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